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Show 16 Utah Division of Securities identifies Francine A. Giani, Executive Execu-tive Director for the Utah Department of Commerce has announced that the Division Di-vision of Securities has released re-leased a top ten list of investment invest-ment scams for 2007. The list, details fraudulent activity tracked by the Division of Securities over the past year and offers predictions on which investment schemes to watch for in 2007. Xlose to 50 of all enforcement en-forcement actions brought by the Division of Securities in 2006 involved a person with a prior criminal background back-ground or state sanction," said Wayne Klein, Director of the Division of Securities, "We urge investors to check out the promoter's background back-ground and investment offers of-fers with our Division before handing over your money." Top Ten Investment scam predictions for 2007 1. Real Estate Investments Mutual ' Life UNITED Insurance HEIqIMje, Company ROBERT E. AVERETT General Agent Bus. (801) 489-6313 Cell (801) 372-6051 1 8 1 5 East Center St. P.O. Box 336 Springville, UT 84663 44 Years in the Insurance Business! f7 j MIB00KWBE.COMSAVE ' l yj The Most Intelligent ' Home-based Business . ' , In The World. '' 1 independent associate Sam & Vickee Barker 489-1915 : I Q wm 79 S. State Orem, UT H2H3J i( ' ' ft f" f" ft Edison Stanford V I i bearing Center - n A CLYDE COMPANY 35 E. 400 S. - Springville 491-2600 GARDEN - LUMBER HARDWARE PLUMBING ELECTRICAL AUTOMOTIVE PAINT -TOOLS All your home hardware needs! Real estate values have escalated esca-lated dramatically around the country and in Utah. This ' has hired crooks into the real estate investment industry and has made investors think they can make dramatic dra-matic profits though real estate es-tate investing. These scams take several forms: using your credit (or credit score) to allow promoters to buy homes and resell them, borrowing bor-rowing money to buy and sell (flip) real estate, buying homes at inflated prices in the names of investors with the expectation that there will be money left over to invest, investments in "hard money" lending that will be used to finance high-interest home loans (promising investors 24 interest per month), and claiming that real estate collateral means the investment has no risk. Investors should be especially espe-cially wary of any promoter TUTORING CLUB; Reading, Math, Writing, Custom Tutoring, GED Prep., and ACT Prep. 229-CLUB (2582) . f f SPRINGVILLE HERALD who suggests that the investor in-vestor borrow money from home equity to make an investment. in-vestment. During 2006, the Division brought actions against ten different types of real estate es-tate investment schemes for fraudulent practices or other violations of the law. 2. Note Brokering The Division is receiving many calls from citizens who purchased pur-chased training courses teaching them how to become be-come loan brokers, only to discover that they must be licensed as securities brokers bro-kers to sell notes. Several companies advertise on the Internet and through television televi-sion infomercials that they will teach investors how to purchase real estate notes at a discount, list them on a web site sponsored by the Internet and through television televi-sion infomercials that they will teach investors how to purchase real estate notes at a discount, list them on a web site sponsored by the company, and resell them at a profit. The companies take large fees from investors, claiming the investors can start their own "successful in-home note businesses" and make thousands in profits. The buying and selling of notes for investment requires a securities license and full disclosure dis-closure to customers. 3. "Free Meal" Seminars for Seniors Many seniors receive re-ceive invitations to a seminar at which investment advice will be offered along with a promise of a free meal At the seminar, seniors are told they can increase their investment in-vestment income, avoid taxes tax-es and earn safe and guaranteed guar-anteed returns. At the conclusion con-clusion of the seminar, each senior is asked to make an appointment for a personal visit at which the senior's investment in-vestment goals can be analyzed. ana-lyzed. Frequently, these individual indi-vidual meetings are used to learri about all of the senior's assets and to recommend that they sell their current investments and purchase variable annuities or equity-indexed equity-indexed annuities. These annuities can be appropriate ap-propriate for some investors, but they can be complex and carry extremely high fees and long holding periods. Many of those targeting seniors se-niors with free-meal pitches claim to be certified experts, when often the certifications mean nothing more than the person has been trained on what sales pitches are most effective with seniors. During fiscal year 20042005, state securities regulators across the country coun-try found that over 25 of all enforcement actions involved in-volved the financial exploitation exploi-tation of seniors and more than 30 involved the sale of variable or equity-indexed annuities. These statistics were supplied by the North GREAT NEWS! State Farm has reduced auto rates in UTAH ;' V LIKE A GOOD NEIGHBOR Providing Insurance and State faffl MllHlSi A4nrili!(i mrni m St f Meimtv Umpany !NJj torenstai, i " - 'itjH Top Ten Investment Scams for 2007 American Securities Administrators Admin-istrators Association (NA-SAA). (NA-SAA). 4. Prime Banks Prime bank schemes involve claims that money can be deposited depos-ited with European banks or financial institutions in the U.S. and used to facilitate financial fi-nancial transactions around the world. Generally, investors inves-tors are told they will receive high-yield, tax free returns through trading by international interna-tional elite, or "prime" banks. In one case brought by the Division, promoters claimed investors could receive up to 160 profit per week, that no one had lost money in the investment, and that more than 20 people already had invested $17 million in the program Investors are told there is no risk because their money will never leave their control in bank accounts. One of the promoters claimed to be able to of fer this program because he had been appointed a "mediator" by the International Monetary Mon-etary Fund (IMF). These claims are all false; there is no such thing as prime banks which use money from investors to facilitate transactions. The supposed IMF mediator had previously previous-ly been ordered by Missouri securities enforcers to cease selling these investments. 5. "Hot Tip" Stock Recommendations Rec-ommendations via E-mail Move over Nigerian scams, the most prevalent unsolicited unsolic-ited e-mails now offer stock tips. Some emails pretend to contain inside information directed to another person. Most e-mails use language proclaiming the urgency of buying a particular stock: "Get the stock First Thing Tomorrow," "This is Going Go-ing to Explode!" "Check out for HOT NEWS!!!," or "The alert is ON!" The e-mails will generally list a current price for the stock of less than $1, saying there is a target price of $3 or $5 per share. An anti-spam company said that 13 of all e-mails sent were touting penny stocks. One recent study found that investors who act on email invitations lose an average av-erage of 5.25 of their money mon-ey in the first two days. Another An-other study found that over a longer term, investors who purchase these stocks lose a . third of their investments. 6. Church FraudsAffinity FraudsAffin-ity Frauds One of the most effective ways to defraud others is to belong to their church or have some other shared association. This might be serving on the PTA, coaching kids' sports, or being be-ing co-workers. People naturally natu-rally trust those with whom they associate and ask fewer questions. Crooks know this and will use those feelings of trust when soliciting money. The most common affinity fraud is religion Enforcers of state securities securi-ties laws have found that At Suit Farm, youT! get more than a great rale. You'll also get an agent dedicated to helping you get the right coverage backed by the nation's' largest claims network. Call my office today and discover why State Farm is trusted by more drivers than any other car insurance company. Deana Hill Insurance Agcy Inc Oeana Hill, Agent Springville, UT 84663-4013 Bus: 801-489-9444 z STATE FARM IS THERE. Financial Services' Wk.otb 1 r... uh 80,000 people were victimized victim-ized between 1998 and 2001, losing nearly $2 billion in church frauds. Arizona has been fighting many frauds with religious origins, some with Utah connections. Last summer, Arizona convicted two officers of the Baptist Foundation of America for their role in a scheme that took $590 million from 11,000 investors. Arizona filed suit against Mathon Management for a $167 million fraud involving hundreds hun-dreds of investors, including some in Utah. That state also took action against a group called "Believing "Be-lieving in Jesus Investments, LLC," which was sold in presentations pre-sentations at church groups. Believers purchase memberships mem-berships in one of four programs, pro-grams, including "Christian Millionaires in Training." In Utah, we see many frauds promoted through churches, but also among parents watching their children chil-dren play sports, among coworkers, co-workers, and even a fraud targeted at families of prison inmates. 7. Foreign Currency Trading Beware of promoters promot-ers claiming to have special expertise in buying and selling international currencies. curren-cies. The Division has seen an increase in people claiming claim-ing to be making huge profit trading currencies. Foreign exchange trading (forex) is notoriously risky and dominated domi-nated by large banks and professional traders. A local promoter might be able to create the impression of success suc-cess by having an office with multiple computer screens tracking financial markets or by creating fictitious account ac-count statements showing huge returns, but disappointment disappoint-ment awaits. In three cases prosecuted by the Division against forex promoters in 2006, the promoters pro-moters always claimed special spe-cial expertise, but in every case some or all of the investor inves-tor money was used to pay the promoter's personal expenses. ex-penses. In all three cases the promoters were not licensed to sell securities or commodities. commod-ities. 8. Oil and Gas Investments Invest-ments As expected, the high price of gasoline is leading lead-ing to a spurt of investment frauds relating to claims the investor can own part of an oil well In August 2006, a Washington County man agreed to cease and desist selling securities after being accused of promising an investor in-vestor his deposit would be backed by an existing oil and gas lease in Texas. Criminal and administrative charges are pending against a Cache County man who allegedly took money from investors claiming the money would be used for oil wells. The Division expects fraud to increase, including claims . of new technology for extracting ex-tracting oil from tar sands or oil shale. As oil exploration intensifies in the Uintah Basin Ba-sin using new technologies, investors should expect to be pitched to invest in new in f s o Easy Clean Feature R Lifetime Guarantee Energy Efficient Quality Installation 'Some restrictions apply. w age msms m f ii ! sAM Sno PaymentZ j No Interest Until Thursday, September 27, 2007 ventions or claims of new oil discoveries. Investors should consult with experts before making any investments in this highly-technical area and make sure the securities are registered. 9. Deceptive Internet Investing In-vesting Many Internet web sites offer investment programs. pro-grams. Few are managed by licensed securities brokers; bro-kers; many are completely fraudulent. Recently, the Division has discovered two investment programs being offered over the Internet by companies claiming to be headquartered in Utah. The Utah addresses given on the Internet sites do not exist. One offers three "investment "invest-ment programs" paying from 5 12 profit per day! Investors can choose the professional pro-fessional plan, the V.I.P. plan, of the "Hot" plan. Investors are also promised 5 commissions com-missions for other investors they refer to this investment program. The company claims to be licensed, but the only license it has is a business busi-ness license issued by Salt Lake City. The other site uses fancy language promising "strategic "stra-tegic turnkey solutions that maximize shareholder value." val-ue." Investors who pay deposits de-posits of $37,500 are promised prom-ised profits of $376,938. The investors are required to send money via wire transfer trans-fer to a bank in Panama, where the money disappears. Just because an investment has an Internet site does not mean it is legitimate. In fact, these solicitations prove that the information posted on Internet sites may be completely com-pletely false. 10. Promissory Notes or Guarantees Notes and guarantees guar-antees are commonlycollat-eraL commonlycollat-eraL In reality, a note is just a person's promise to pay and provides no protection if the person giving the note is in a precarious financial condition. condi-tion. Investors should ask themselves: If this company is in such good financial condition, con-dition, why are they borrowing borrow-ing money from me? What collateral will be put in my name to ensure the note is repaid? More than 40 of the frauds prosecuted by the Division in 2006 involved the sale of promissory notes or guarantees given by the promoters. When promissory promis-sory notes or guarantees are given to investors in return for an investment of money, the notes are securities and the sellers must comply with the securities laws. What Can Investors Do to Protect Themselves? Investors need to understand that promises prom-ises of higher returns means there is high risk. Just because be-cause a promoter says an investment has no risk or is guaranteed, does not mean the risk is low. Investors should ask themselves: if there is so much profit to be made with no risk, why are they borrowing money from me and not a bank? The answer an-swer generally is that a bank has already refused to lend them money. 10 WINDOW IltlSTALLfcu tA I Wasatch Vinyl Products i &itt77.922.72n3i - ww w www i-vnirpc yywii |